ReShape Lifesciences Enters into Early Warrant Exercise Transaction and Receives an Additional $7.65 Million in Proceeds

SAN CLEMENTE, CA / ACCESSWIRE / September 23, 2019 / ReShape Lifesciences Inc. (OTCQB:RSLS), a developer of minimally invasive medical devices to treat obesity and metabolic diseases, today entered into an early warrant exercise transaction with the holders of 400,000,000 Series B Warrants issued in ReShape’s June 2019 private placement pursuant to a warrant exercise agreement. The early exercise of the warrants resulted in approximately $7.65 million of aggregate gross proceeds to ReShape. ReShape intends to use the net proceeds from the warrant exercise for general working capital purposes. Together with the approximately $7.6 million in gross proceeds initially received by ReShape in June 2019 in connection with the private placement, ReShape has now received approximately $15.3 million in gross proceeds in connection with this private placement.

As an incentive for the warrant holders to exercise their warrants in full, the warrant holders will be issued new warrants to purchase up to 400,000,000 unregistered shares of ReShape’s common stock, in the aggregate, at an exercise price of $0.05 per share, through a private placement. The number of shares of common stock (and common stock equivalents) issuable to the investors is subject to adjustment following the effectuation of a reverse stock split by ReShape, as set forth in the warrants. The transaction is anticipated to close on or about September 25, 2019, subject to customary closing conditions.

H.C. Wainwright & Co. is acting as the exclusive placement agent for this transaction.

The securities sold in the private placement have not been registered under the Securities Act of 1933, as amended, or state securities laws and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission (SEC) or an applicable exemption from such registration requirements.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.

Further information regarding this transaction can be found in the Current Report on Form 8-K that will be filed by ReShape with the SEC.

About ReShape Lifesciences Inc.

ReShape Lifesciences™ is a medical device company focused on technologies to treat obesity and metabolic diseases. The FDA-approved LAP-BAND® Adjustable Gastric Banding System is designed to provide minimally invasive long-term treatment of severe obesity and is an alternative to more invasive surgical stapling procedures such as the gastric bypass or sleeve gastrectomy. The ReShape Vest™ System is an investigational, minimally invasive, laparoscopically implanted medical device that wraps around the stomach, emulating the gastric volume reduction effect of conventional weight-loss surgery, and is intended to enable rapid weight loss in obese and morbidly obese patients without permanently changing patient anatomy.

Forward-Looking Safe Harbor Statement:

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this release include statements regarding the satisfaction of customary closing conditions in connection with the private placement and the anticipated use of proceeds therefrom. These forward-looking statements generally can be identified by the use of words such as “expect,” “plan,” “anticipate,” “could,” “may,” “intend,” “will,” “continue,” “future,” other words of similar meaning and the use of future dates. These forward-looking statements are based on the current expectations of ReShape’s management and involve known and unknown risks and uncertainties that may cause ReShape’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks and uncertainties include, among others: statements relating to the completion, size and use of proceeds of the private placement that involve risks and uncertainties, including, without limitation, risks and uncertainties related to market conditions and the satisfaction of closing conditions related to the private placement, the ability of ReShape to effect a reverse stock split, risks and uncertainties related to ReShape’s acquisition of the Lap-Band system, including the risk of default under its security agreement with Apollo Endosurgery entered into in connection with the transaction; ReShape’s ability to continue as a going concern if it is unable to improve its operating results or obtain additional financing; risks related to ownership of ReShape’s securities as a result of its delisting from the Nasdaq Capital Market; ReShape’s proposed ReShape Vest product may not be successfully developed and commercialized; ReShape’s limited history of operations; ReShape’s losses since inception and for the foreseeable future; ReShape’s limited commercial sales experience; the competitive industry in which ReShape operates; ReShape’s dependence on third parties to initiate and perform clinical trials; the need to obtain regulatory approval for ReShape’s ReShape Vest and any modifications to ReShape’s vBloc system and Lap-Band system; physician adoption of ReShape’s products; ReShape’s ability to obtain third party coding, coverage or payment levels; ongoing regulatory compliance; ReShape’s dependence on third party manufacturers and suppliers; the successful development of ReShape’s sales and marketing capabilities; ReShape’s ability to raise additional capital when needed; international commercialization and operation; ReShape’s ability to attract and retain management and other personnel and to manage growth effectively; potential product liability claims; the cost and management time of operating a public company; potential healthcare fraud and abuse claims; healthcare legislative reform; and ReShape’s ability to obtain and maintain intellectual property protection for ReShape’s technology and products. These and additional risks and uncertainties are described more fully in ReShape’s filings with the Securities and Exchange Commission, particularly those factors identified as “risk factors” in ReShape’s annual report on Form 10-K filed May 16, 2019 and subsequent quarterly reports on Form 10-Q. We are providing this information as of the date of this press release and do not undertake any obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise, except as required by law.

Investor Contact:
Scott Youngstrom
Chief Financial Officer
ReShape Lifesciences Inc.
949-429-6680 x106
syoungstrom@reshapelifesci.com

or

Debbie Kaster
Investor Relations
Gilmartin Group
415-937-5403
debbie@gilmartinir.com

SOURCE: ReShape Lifesciences Inc.

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